Ramping Your Brand (a review)
“What people say, what people do, and what they say they do are entirely different things”
- Margaret Mead
This quote by the pioneering anthropologist Margaret Mead concisely explains why it is so difficult to truly determine people’s motives behind their behavior. Another anthropologist, Dr. James Richardson in Ramping Your Brand (2019) has pointed his academically-trained lens more specifically at the question: what drives consumers to purchase a new or emerging brand?
Richardson’s book is a must-read for any aspiring consumer product entrepreneur and I highly recommend it. He writes at length about very specific problems facing consumer entrepreneurs at various stages of a brand’s lifecycle. As a seasoned consultant and advisor to many emerging brands, Richardson draws on countless examples and offers numerous helpful frameworks.
My goal with this piece is to surface the most interesting concept from the book and highlight one key area where my thinking deviates, using 2 examples.
Who exactly is the audience for an emerging brand?
In a previous post Simple Stories Scale, I discussed how to grab a consumer’s attention – but who exactly is the consumer? In marketing jargon, we must define the consumer persona. Richardson nails this concept.
Step #1: Defining premium-curious shoppers:
Richardson defines a consumer persona superset as those consumers willing to pay a modest premium for a perceived higher-quality product versus the incumbent. Said another way, price is not always their top priority when making purchasing decisions. I call this group “premium-curious shoppers.”
Step #2: Further segmenting premium-curious shoppers by persona:
Within premium-curious shoppers, Richardson outlines 4 types of consumer personas:
i) Status buyers: Higher income buyers who care deeply about what others think of their purchases but are not particularly interested with brand or product attributes
ii) Hard-core purity buyers: Ideologically inclined consumers putting a very high weighting on social, ethical or environmental factors when making purchase decisions
iii) Category geeks: Nerdy consumers who have researched one or several industry categories in depth to form strong views related to nutritional value or product efficacy
iv) Pragmatic adopters: By far the largest persona by population and composed of primarily middle class people who are open to paying for a premium product if it truly speaks to them. On average, their disposable income is more limited than other premium-curious personas and therefore they are selective where to indulge. They may be influenced by various health ideologies but are not obsessed like ii) or iii) above.
What is the single biggest mistake consumer entrepreneurs typically make?
“Premium CPG founders tend to be category geeks, but they must learn how to design products and sell to status buyers and pragmatic adopters if they want to scale fast and scale at all. End of story.” (Ramping Your Brand by Dr. Richardson, 2019, p141)
Richardson’s main thesis is that many consumer founders are ‘category geeks’ and do not fully understand that their audience is primarily ‘pragmatic adopters’ and some ‘status buyers’. Said another way, category geeks (I put myself in that bucket) persistently overestimate how much their customers care about the nerdy science or righteous messaging of an emerging consumer brand.
Zooming out, the rest of this piece is a commentary on the book as a whole.
Where do I agree with Dr. Richardson?
There are stunning examples of scale, capital efficiency, and returns among consumer product companies
In the past decade, there have been too many mediocre “me too” products getting created and funded. Such companies are not investing enough in a competitive advantage, from a formulation or a marketing perspective, to offer a strong value proposition to large numbers of consumers
Founders need to be ‘category geeks’ but also effectively connect with their consumers to drive memorability and trust. Successful founders must understand why their competitors are both succeeding and falling short. There needs to be a crisp and simple articulation of why their product will resonate with mass market consumers.
Educating consumers on the health benefits of a product typically does not work. Consumers want to feel like they “discovered” something magical and not feel lectured or talked down to by elites with different values.
Where do I disagree with Dr. Richardson?
Richardson believes that nearly all ‘pragmatic adopters’ (i.e. the early adopters of premium brands) are not particularly focused on investing in their long-term health outcomes. Rather, they are always focused on the immediate way a product affects their social lives. As such, a decision to try a new product is only in relation to a consumer’s “immediate social life.” 1
Are all consumers solely focused on the short-term?
As I outlined in Simple Stories Scale, I believe that a brand only has a short window of time to make an emotional connection with a pragmatic adopter. At least part of such a connection may be related to long-term health goals of said pragmatic adopter. I disagree with Richardson that all decisions are made in relation to a person’s short-term social circumstances.
Let’s look at 2 examples of illustrative motivating factors driving the initial purchase decision by a pragmatic adopter (before taste / efficacy is known and assuming no word-of-mouth recommendation):
KIND
KIND bar sold to Mars at a $5 billion valuation2 in 2020. Here are 2 hypotheses of why consumers were increasingly attracted to this brand’s identity and messaging, prior to tasting the product:
Hypothesis A: KIND’s transparent packaging with mostly real food ingredients shows to my family and friends that I’m an honest, responsible and disciplined person since I did not opt for the highly processed bar alternative.
Hypothesis B: KIND’s transparent packaging and mostly real food ingredients, including healthy fats and ample fiber, aligns with my goal to balance taste and nutrition so I can remain physically active with my family and friends for the next 4 decades.
Primal Kitchen
Primal Kitchen sold to Kraft Heinz at a $200 million valuation3 in 2018. Similarly, here are 2 hypotheses driving the initial purchase:
Hypothesis A: Primal Kitchen’s paleo-inspired name and ancient warrior imagery means that I’m going to build lean muscle faster, versus consuming the alternative mayo option, so I can outperform my friends in my upcoming crossfit classes.
Hypothesis B: Primal Kitchen’s paleo-inspired name, ancient warrior imagery, and replacement of seed oil with avocado oil, will positively affect my metabolic health and ability to burn fat, thereby allowing me to play basketball with my friends for several more decades.
I believe both hypotheses can be accurate within a large group. Clearly some people are motivated by short-term variables (e.g. how one is perceived today). Alternatively, others are motivated by longer-term goals (e.g. an ability to enjoy life 20+ years from now).
What do consumers actually care about when you pry?
Richardson’s point is that when you really drill down and get consumers to tell you the truth (no doubt extremely hard for any stranger), people are inherently short-term oriented, largely focused on their perception by others, and nowhere geeky enough to even know what ‘metabolic health’ means. In other words, he is going all-in on Hypothesis A, every time.
I’m sure Hypothesis A answers are accurate for some, perhaps most, of the pragmatic adopter cohort. That said, I disagree that immediate short-term factors are always the motivating factor. If someone has a family member or close friend with diabetes, they probably will know about metabolic health.
Further segmenting pragmatic adopters
I also believe that focusing on the 2nd derivative is very important when thinking about trends. For example, the first derivative of change is that “pragmatic adopters” believe Product X’s simple story and buy said product (defined as “velocity” industry parlance). The 2nd derivative is whether the rate of pragmatic adopter velocity is increasing or decreasing.
To understand velocity and, even more importantly, changes in velocity, a determination of what is driving people to become pragmatic adopters in the aggregate, across all product categories, is relevant. Simplistically, if somehow we were able to break out A) short-term factors versus B) long-term factors, I would hypothesize that B is taking share from A.
While I agree with Richardson that middle class consumers do not want to be told by coastal elites (read: marketing agencies or typical founders) that they should care about “longevity” or “quality of life”, I would bet that an increasing amount are driven to try premium / higher-quality products because of some longer-term health goal.
How can it be that 50% of consumers in the US regularly exercise (of which ~50% do it rigorously4) and yet no pragmatic adopters think about the long-term implications of nutrition at least occasionally. Exercise is a textbook case of choosing short-term discomfort for the benefit of long-term health.
Similar to nutrition, we are still learning what is optimal regarding exercise. I’ll dive into some interesting exercise topics in my next post. I’m quite sure Dr. Richardson will NOT be reading that one!
“You have to be super neurotic to care deeply about something that doesn’t affect your immediate social life.” Ramping Your Brand (Richardson, 2019, p50)